The importance of Revenue Growth Management (RGM) is increasing.
Rising costs in raw materials, logistics and labour, compounded by cautious consumer purchasing behaviour, means that businesses are facing tighter margins than ever before. Effective revenue management has become critical for FMCG companies to stay competitive and profitable.
In this environment, managing revenue effectively is much more than setting a pricing plan - it's about designing an organisational approach with RGM principles and practices integrated throughout both internal and external business processes.
Strategic Organisation Design matters.
A strategic approach to organisational design, integrating RGM, is essential for FMCG companies given the inherently cross-functional nature of the discipline. RGM interacts with nearly every facet of the business—marketing, sales, finance, and supply chain—making understanding and alignment critical to achieving cohesive business goals.
Well-defined roles & responsibilities, key performance indicators (KPIs), integrated processes and capability agendas enable revenue management to work effectively and harmoniously with other functions. In the absence of these, it is not uncommon for silos to develop, leading to competing priorities, inefficiencies and unnecessary friction.
An understanding of the critical role RGM plays in reaching business goals, how it will connect and operate is the key to success.
5 characteristic traits of best-in-class businesses:
In designing the way forward, it is useful to look at common elements of already-successful structures:
1. People and culture:
Focus on people and culture is essential for any business aiming to embed RGM.
Creating a business-wide understanding of revenue management’s strategic value ensures that every team - sales, finance, marketing or operations -sees how their work impacts and can benefit.
Clear roles and responsibilities allow teams to know precisely where they fit and what to expect. Aligning cross-functional KPIs fosters collaboration, encourages teamwork rather than competing priorities.
A cross-functional capability agenda that prioritizes skill-building and knowledge-sharing equips employees with the tools to contribute meaningfully to revenue management today and builds organisational bench-strength for the future.
2. Business Process:
It's important to establish the ways-of-working to build connectivity.
A robust framework for strategic, long-term revenue management goal-setting allows companies to agree shared objectives that drive sustainable growth.
Effective plan sign-off protocols ensure that revenue strategies are fully vetted, with buy-in from all relevant stakeholders before implementation. This fosters accountability and reduces misalignment.
In today’s dynamic market, in-year plan change approval processes are crucial to enable businesses to adapt swiftly to unforeseen shifts in demand or cost structures without derailing overall strategy.
Post-evaluation processes allow teams to assess what worked, what didn’t, and why— providing insight and learning opportunities.
3. Systems and Tools:
Systems, tools and methodology are fundamental in a data-driven environment.
Accessible, automated analysis tools empower teams to quickly analyse and visualise vast amounts of available data without needing extensive technical expertise.
Scenario planning models forecast potential outcomes under different market conditions, helping businesses proactively adjust strategies to mitigate risks or capitalize on opportunities.
Systems and tools to navigate in a data-driven environment.
4. Plan Build Approach:
Understand how RGM input components stack-up together, and fit into the broader business picture.
A deep understanding of the market—its trends, challenges, and opportunities—ensures that RGM decisions are aligned with current and future dynamics.
Integrating RGM into the holistic business plan ensures that strategies work synergistically with broader business initiatives.
5. Plan Execution:
Robust governance of the plan ensures accountability, maintains focus and avoids deviation from the agreed-upon strategy.
Tracking the plan’s progress through regular performance reviews and data-driven insights allows businesses to monitor success, identify gaps, and optimize the outcome.
Integrating RGM into retailer joint business plans (JBPs) through a joint value creation mindset fosters collaboration and enhances effectiveness.
Aligned execution optimises effort and makes real-time adjustments possible as market conditions evolve.
Shape the Future, don't be Shaped by It.
Revenue Growth Management (RGM) is critical for FMCG companies in today's economic climate.
To succeed, businesses must actively design how revenue management integrates into all aspects of the business from plan building through to execution.
Fostering a culture of collaboration, defining clear roles and agreeing best utilization of systems and tools will ensure continuous alignment and accountability across functions.
Why Real World Marketing?
Our experienced consultants and trainers are former FMCG leaders who have guided some of the brightest minds in our field. With deep-rooted expertise in the consumer goods industry, we are well-placed to support you and your teams as trusted coaches and mentors, with help tailored to your unique requirements.
If you need assistance with how to develop or evolve RGM for greater impact in your business, please reach out to one of the team at Real World Marketing.
We’re here to help you navigate complexity and achieve your business goals.